Indian equity markets came back
in strong rally mood on Thursday, with Sensex & Nifty ending higher by
around 1.55% each. The start of the day was on strong note, aided with industry
body FICCI's statement that the government should infuse capital in the economy
without worrying about the fiscal deficit target as the GDP growth is estimated
to slip to 11-year low of 5% during 2019-20. Adding some relief, SBI Chairman
Rajnish Kumar said that banking sector is going to see good recoveries from
non-performing assets in the third & fourth quarters of current fiscal,
helped by resolution of some large stressed accounts. Key bourses maintained
their gaining momentum in the second half of the trading session, on the back
of firm cues from the global markets. Investors were seen taking a note of
credit rating agency, India Ratings and Research's (Ind-Ra) report that India
will have to raise its labour productivity growth to 6.3 per cent to achieve 8
per cent GDP growth. The labour productivity growth in FY19 was 5.2 per cent.
The street paid no heed towards the World Bank's latest report stating that
growth in India is projected to decelerate to 5% in financial year (FY)
2019/20, which ends March 31, amid enduring financial sector issues. Finally,
the BSE Sensex gained 634.61 points or 1.55% to 41,452.35, while the CNX Nifty
was up by 190.55 points or 1.58% to 12,215.90.
Magnifying their previous
session's rally, the US markets ended higher with gains of over half percent on
Thursday as investors focused on
progress on the trade pact with China due to be signed next week and amid an
easing of concerns about war in the Middle East. China's top trade negotiator,
Vice Premier Liu He, will lead a delegation to Washington next week to sign a
phase-one trade deal. Trade negotiations
have been a driver for market moves for more than a year because President
Trump's imposition of import tariffs has slowed global economic growth. The
progress on China trade talks has helped, at least momentarily, to put the
threat of conflict between the Washington and Tehran on the back burner after
the Islamic Republic late Tuesday launched a missile strike on US military
bases in Iraq in retaliation for the killing of one of its top generals last
week. All three benchmarks set new intraday and closing highs, with the Dow
nearing the psychologically important 29,000 threshold. On the economic data
front, with the more closely watched monthly jobs report looming, the Labor
Department released a report showing first-time claims for US unemployment
benefits fell by more than expected in the week ended January 4. The report
said initial jobless claims dropped to 214,000, a decrease of 9,000 from the
previous week's revised level of 223,000. Street had expected jobless claims to
edge down to 220,000 from the 222,000 originally reported for the previous
week. The Labor Department said the four-week moving average also slid to
224,000, a decrease of 9,500 from the previous week's revised average of 233,500.
The less volatile four-week moving average pulled back after hitting its
highest level since January of 2018 in the previous week.
Crude oil futures ended
marginally lower on Thursday as traders digested data that revealed a big jump
in crude stockpiles in the US, and as Mideast tensions saw some apparent
easing. Meanwhile, reports emerged that two US officials said it was highly
likely that an Iranian anti-aircraft missile downed a Ukrainian jetliner
Tuesday, possibly by mistake, killing all aboard. Still, the momentary calm in
Mideast anxieties, which could have disrupted crude production in the oil-rich
region, has anchored prices. Crude oil futures for February declined by 5 cents
or less than 0.1 percent to settle at $59.56 a barrel on the New York
Mercantile Exchange. March Brent fell 7 cents or 0.1 percent to settle at
$65.37 a barrel on London's Intercontinental Exchange.
Extending
its gaining streak for a third straight day, Indian rupee ended significantly
higher against dollar on Thursday, on persistent selling of the American
currency by exporters. Sentiments were buoyed with industry body FICCI's
statement that the government should infuse capital in the economy without
worrying about the fiscal deficit target as the GDP growth is estimated to slip
to 11-year low of 5% during 2019-20. A spectacular relief rally in local
equities coupled with softening crude oil prices also supported the forex
sentiment. Traders paid no heed towards the World Bank's latest report stating
that growth in India is projected to decelerate to 5% in financial year (FY)
2019/20, which ends March 31, amid enduring financial sector issues. On the
global front, US dollar rose on Thursday, as investors' fears over escalating
US-Iran tensions eased following US President Donald Trump's remarks on an Iran
attack. Finally, the rupee ended at
71.21, 49 paise stronger from its previous close of 71.70 on Wednesday.
The
FIIs as per Thursday's data were net sellers in equity segment, while they were
net buyers in debt segment. In equity segment, the gross buying was of Rs
3974.18 crore against gross selling of Rs 4318.93 crore, while in the debt segment,
the gross purchase was of Rs 1005.36 crore with gross sales of Rs 940.24 crore.
Besides, in the hybrid segment, the gross buying was of Rs 100.00 crore against
gross selling of Rs 427.71 crore.
The US markets ended higher on
Thursday as tensions between Iran and the US eased for the time being, with
tech shares outperforming. Asian markets are trading mostly in green on Friday
following the easing of US-Iran tensions, and after US stocks shot to new highs
overnight. Indian markets ended higher with gains over one and half a percent
each on Thursday as investors remained optimistic amid temporary de-escalation
of a heated rhetoric between the US and Iran. Today, the markets are likely to
get a cautious start ahead of industrial growth data for the month of November
to be out later in the day. Also, traders will be looking for the third quarter
results with Infosys is scheduled to announce its December quarter numbers
later in the day. The IT service provider is expected to post revenue growth of
0.9% to 2.1% on a sequential basis for the quarter ended December 31, mainly on
account of the company's cross-currency gains and business transfer of Eishtec
in Ireland. There will be some cautiousness with a private report indicating
that increase in vegetable prices has probably pushed retail inflation to its
highest in over five years in December, far more than the Reserve Bank of
India's medium-term target of 4% for a third straight month. Traders will be
concerned with report that amid a slowdown in economic activity, state-owned
Sidbi said credit supply growth to the commercial sector has slowed to a
multi-year low of 8.1 per cent for the 12 months ended September 2019. However,
some support may come later in the day with Prime Minister Narendra Modi's
statement that fundamentals of the Indian economy are strong and it has the
capacity to bounce back. There will be some buzz in the aviation stocks with
the International Air Transport Association's (IATA) data showing that reaching
double digits for the first time since January 2019, domestic passenger traffic
growth in India jumped to 11.3% in November as compared to the corresponding
month of 2018. Telecom stocks will be in focus with industry body PHDCCI's
statement that auction of 5G spectrum should be taken up after 2-3 years, which
will help the government get proper valuations of the 5G airwaves. There will
be some reaction in fast moving consumer goods (FMCG) stocks with report that despite
some definite signs of improvement in economy in the near future, CARE Ratings
does not expect much improvement in Indian FMCG sector until Q3 FY21.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
12,215.90
|
12,157.62
|
12,249.12
|
BSE Sensex
|
41,452.35
|
41,258.01
|
41,564.41
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
1,520.26
|
47.30
|
46.23
|
48.43
|
Tata Motors
|
408.03
|
192.00
|
186.58
|
195.08
|
SBI
|
403.48
|
330.20
|
326.33
|
332.73
|
ICICI Bank
|
189.34
|
546.30
|
535.27
|
552.37
|
Bharti Airtel
|
178.46
|
460.10
|
451.95
|
471.60
|
Bharti Airtel has opened QIP process to raise $2 billion and has launched FCCBs worth up to $1 billion.
TCS has expanded its partnership with Vipps AS to leverage TCS' Machine First Delivery Model and cloud services to accelerate the latter's growth and digital journey.
Bajaj Auto is going to launch the Chetak electric scooter in India on January 14.
NTPC is in talks with Government of Rajasthan to sign a MoU for developing a 925 MW solar park in Jaisalmer.